Question

Since China is the second-largest economy at current, especially, how does this protectionism affect your business conditions when your selected company deals with a business in the China market and Chinese-driven markets across the world (e.g., Chinese communities have strong bargaining power in many countries)? Also, how would this politico-economic conflict between the two countries affect when your selected company does business in closely allied countries with China (e.g., BRICS, ASEAN, the third world countries, etc.)? On the other hand, what kind of business opportunities can arise for your selected company by enhancing the politico-economic relationship between the U.S. and its allied countries (e.g., Five eyes, G7, etc.)? In addition, how would the current U.S. politico-economic direction, such as the "America First" trade policy and/or "Inflation Reduction Act," affect the politico-economic relationships between the U.S. and its allied countries?

Answer 1

Protectionism poses challenges for businesses by causing higher consumer prices and trade tensions, yet managed relations with China and allies can lead to new opportunities. 'America First' policies may strengthen domestic industries but strain international relations.

Step-by-step explanation:

Dealing with protectionism and the complexities of international trade within the context of China's burgeoning economy presents both challenges and opportunities for businesses. The imposition of protectionist measures, such as tariffs and quotas, typically leads to higher prices for consumers and may create trade tensions that negatively impact sectors heavily reliant on exports, like agriculture. Protectionist policies can also prompt retaliatory measures, disrupting global supply chains and leading to uncertainties in business conditions. However, engaging in business within Chinese-driven markets or communities with strong bargaining power, such as BRICS and ASEAN countries, could be beneficial if diplomatic and trade relations are carefully managed.

On the flip side, enhancing politico-economic relationships with U.S. allied countries could open up new opportunities, particularly when trade agreements incorporate protections for human rights and the environment, thus preventing a race to the bottom in terms of production standards. Policies like the 'America First' trade policy or 'Inflation Reduction Act' may strengthen domestic industries but could also strain relations with allies if perceived as too inward-looking or protectionist.